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Crude Oil Inventories Tighten but Election Result Dominates

Crude oil price
Crude oil price

WTI crude is lower on Wednesday after an almost $5 rally in prices over the last few trading days. Oil got a boost from lower inventory stockpiles but the election result will continue to dominate the landscape.

Crude stocks were lower by 8 million barrels to around 490 million barrels, according to the American Petroleum Institute (API). This was lower than the expected increase of 890,000 barrels. Oil has been struggling over the last two weeks after the surge in virus cases saw lockdowns in France and Germany into early-December, while the U.K. was imposing further rules, alongside Italy, Norway, and Hungary. The return to lockdowns has traders fearing another blow to the already fragile global growth picture.

Oil has been rising this week as the current President Donald Trump moved ahead in the betting in the race for the White House. The oil market was fearing the green agenda of Joe Biden and that is the reason Trump has taken the oil states of Texas, Louisiana, and Oklahoma.

Today will see the release of the EIA’s inventory data and if it confirms the API numbers then crude can get another boost. The election will dominate the trading landscape for the rest of the week. We have a Federal Reserve interest rate announcement tomorrow but there is no expectation for any change in the bank’s current policy and stimulus. 

Crude Oil Technical Outlook

The WTI crude oil price has rallied this week from lows at $34.00 to to almost $39.00. Price has paused with a move back to $37.73 but this is between two support and reistance levels so a breakout will determine whether we see $38.67 or $35.00 next. The Investing Cube team is currently available to help all levels of traders with the Forex Trading Course or one-to-one coaching.   

Crude Oil Daily Chart